Weighing the Options of Refinancing
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It has been said that only when your new interest will be at least 2 points lower, should you refinance your loan. That may have been valid years ago, but as refinancing has been costing less recently, it is a good time to explore the options of a new mortgage loan! Refinancing your mortgage has some advantages that will often make it worth the up-front expenditure many times over.
Benefits from Refinancing
When you refinance, you might have the ability to lower the interest rate and monthly mortgage payment amount, perhaps considerably. You also might be given the option of pulling out some of your home equity by "cashing out" some funds to fix up your home, consolidate debt, or take your family on a vacation. You might be able to refinance into a shorter-term mortgage program, enabling you to add to your home equity quicker.
The Cost
All of these benefits do cost something, though. You'll have the same sort of expenses and fees as with your existing mortgage loan. These may include settlement costs, an appraisal, lender's title insurance, underwriting fees, and others.
Doing the Math
You might consider paying points to reduce your interest rate. Your savings over the life of the mortgage loan could be substantial if you have paid up front about three percent of the new loan total. Please consult a tax professional before acting on advice that any points paid may be deducted on your taxes.
Another thing about taxes is that when your interest rate is lowered, of course you'll also be reducing the paid interest amount that you'll be able to deduct on your taxes. This is one more expense that some borrowers take into account. We can help you do the math! Call us at (207) 571-8034.
All things considered, for most the total of initial costs to refinance are made up very quickly in monthly savings. We will help you find out what program is best for you, looking at your cash on hand, how likely you are to sell your residence in the near future, and how refinancing might effect your taxes. Call us at (207) 571-8034 to get started.
Curious about refinancing your home? Give us a call: (207) 571-8034.